By a show of hands, the majority of the 60 Garment Center workers who gathered in Anna Sui’s showroom Wednesday supported New York City’s proposal to earmark a 300,000-square-foot building for apparel manufacturing, but several saw it as a starting point for additional zoning, not the ultimate solution.
This story first appeared in the April 16, 2009 issue of WWD. Subscribe Today.
While representatives from the Council of Fashion Designers of America have met with city officials off and on for the past few years, this was the first time contractors, button makers and all the other behind-the-scenes business owners had the chance to air any concerns. Beyond the ailing economy, several business owners said they are trying to soldier on despite escalating rents, diminishing production and uncompromising landlords. In hashing out the pros and cons of securing the 300,000-square-foot building at 270 West 38th Street for manufacturing, apparel executives revealed an industry in peril.
Ming Lam, president of the 25-year-old Blue Jet Industries, said his company has gone from a 300-person operation occupying 40,000 square feet to a 60-person one in 7,000 square feet in the past eight years or so. Having relocated “so many times,” he worried this latest plan might not come to fruition. “I would like to know how true this is. If they can’t deliver, why spend the time?” he asked.
Lam mentioned he and a few other contractors are considering pooling their finances to buy a building to share — an idea that perhaps could be layered on to the city’s proposal, according to the CFDA’s executive director Steven Kolb.
Ramdat Harihar, owner of R&C Apparel Corp., said he is relocating to West 39th Street because his current landlord wanted to jack up the monthly rent by 5 percent even though he already faced a 40 percent jump several years ago. He said, “My priority is to keep my employees off the unemployment line. I am the father of four with three kids in college, and I employ 26 people. It’s not easy to make a living.”
Harihar, who works with designers like Sui and Nanette Lepore, said, “Landlords have to do what they have to do, and manufacturers have to do what they have to do. Everybody is trying to save $2 or $5 where they can.”
Warren Brand, president of M&S Schmalberg, which specializes in flowers made of fabrics, prides himself on his Made in the USA status. But that only goes so far when rent is $12,000 a month and he has lost 20 to 30 percent of his business in the past two years.
“We’re here. We’re sincere in our vision, in the way we make samples and how we work with manufacturers. I am the only guy left [doing this type of work]. But I can’t do it out of my love for the industry much longer,” Brand said.
It is no secret that as the number of jobs in the Garment Center continues to dwindle, landlords and real estate developers have been lobbying to try to free up some of the 10 million square feet for higher-paying tenants or even residential buyers. The CFDA’s Kolb offered one of the more telling statements. “We have really been going back and forth with the city, the unions, the BID [Fashion Center Business Improvement District] and GIDC [Garment Industry Development Corporation] to see if we can keep some zoning. But truth be told, the zoning is not working, and it doesn’t really exist. I believe the city is being earnest in keeping some core manufacturing in the Garment District.”
Not wanting to sway the crowd, he explained why he wanted to round up some tenants who thus far had not been privy to the details of the plan. “This is not a good idea unless the people who will occupy this building think it’s a good idea,” he said.
The initial proposal aims to establish full occupancy within a three-year period, with $15 a square foot said to be the going rate for leases. Should apparel companies take up the offer, they stand to have substantial collective bargaining power to upgrade the site. At this stage, the landlord, who has yet to be identified publicly, has offered the property for 20 or 30 years, but some suggested extending that time frame to help extend the neighborhood’s longevity.
There is 850,000 square feet in the Garment District being occupied by apparel manufacturers, a sliver of the area’s total 10 million square feet, according to a GIDC survey. After the meeting, architect Jörg Schwartz, who highlighted the neighborhood’s layout, questioned whether the West 38th Street site would be enough space. Attendees at Wednesday’s relatively compact meeting accounted for 40,000 square feet of Garment Center space alone, he said, adding, “I’m just worried that there won’t be enough space.”
Other recommendations that were made during the discussion included:
• Lining up space in 270 West 38th Street for showrooms, warehouses and other apparel-related operations.
• Establishing a “Made in New York” marketing initiative and use that tagline to name the West 38th Street building.
• Recommending the city recognize existing leases in the Garment Center as rent stabilized.
• Enforcing Garment Center zoning, which allegedly has not happened for years.
• Offer tax subsidies to the building tenants and to those Garment Center tenants that choose to remain in current locations.
Mark Steinberg, owner of Acker & Jablow Fabrics Ltd., noted his company has been based within a four-block radius since 1923. But in the past 10 years, its Garment Center space has slid from 35,000 to 7,500 square feet, due partially to the fact the firm bought a building in South Korea. Steinberg welcomed Wednesday’s candid discussion. “There are no textiles trade groups left to represent us. This is the first time I’ve felt that the city is paying any attention to our plight,” he said
On his way out, Steinberg added, “We need help. We really need help.”